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Banking Law Keyed to Barr, 3rd Ed.
FMC Corp. v. Holliday
Citation:
498 U.S. 52, 111 S. Ct. 403, 112 L.Ed.2d 356 (1990)Facts
FMC Corporation operated a self-funded employee welfare benefit plan that provided health benefits to employees and their dependents. The plan included a subrogation clause requiring plan members to reimburse the plan for benefits paid if the member recovered on a claim in a liability action against a third party. Cynthia Holliday, the daughter of FMC employee Gerald Holliday, was seriously injured in an automobile accident in 1987. The plan paid a portion of her medical expenses. Gerald Holliday brought a negligence action on behalf of his daughter against the driver of the automobile, and the parties settled the claim. FMC notified the Hollidays that it would seek reimbursement for the amounts it had paid for Cynthia’s medical expenses. The Hollidays refused, asserting that Pennsylvania’s Motor Vehicle Financial Responsibility Law § 1720 precluded subrogation by FMC. This law prohibited subrogation or reimbursement from a claimant’s tort recovery with respect to benefits payable under certain programs, including group contracts or other arrangements for payment of benefits.
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